Non-market strategies and firms’ organizational performance. Evidence from the energy sector in Sub-Saharan Africa

Abstract

Firms increasingly employ non-market strategies (NMS), including corporate political activity (CPA) and strategic corporate social responsibility (CSR). Yet, the literature has not come to univocal hypotheses on how and under what conditions NMS, alone or jointly, enhances organizational performance.

By adopting an econometric simulation, corroborated by a fsQCA analysis, we unveil various configurations that combine CSR and CPA strategies, with different dimensions of firms’ performance (namely, economic results and access to resources) and the country’s institutional climate. Our analysis relies on a sample of companies that invested in electricity infrastructure projects in sub-Saharan Africa from 2000 to 2014.

Our findings confirm the complex causal nexus between NMS and the firm’s performance. Neither CPA nor CSR alone is sufficient to achieve high organizational performance, but their co-presence is associated with the enhancement of both types of performance, especially in politically unstable environments. Asymmetrically, organizational performances are hindered by the lack of one or the other NMS, independently of the political climate.